Sweden confirms tax break for data centres following government study

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Swedish data centre operators are to enjoy a vastly reduced electricity tax rate for providing their services after Sweden’s parliament confirmed new legislation.

The move will see the rate for data centres in Sweden move to 0.005 krona, or 0.00054 US dollars per kWh, as of January 1 2017 at a 97% cut.

Last year, a government-led study advocated the move, arguing that the data centre industry should be on an equal footing to the likes of manufacturing, which already has tax breaks on its power and electricity requirements built in. Speaking to this publication at the time of the report’s release Anne Graf, then investment and development director at data centre hub The Node Pole, noted her belief that all stakeholders were for the proposed changes – with the recent decision proving her assertions right.

The Node Pole, which is to be acquired by Vattenfall and Skellefteå Kraft, two of Sweden’s largest energy companies, has among its clientele renewable energy provider Hydro 66 – who claims it can offer colocation at half the cost compared to if they were based in London – and most famously Facebook, whose expansions in Lulea have been well documented.

Sweden’s natural climate and relative close proximity for European customers makes it an attractive proposition for potential customers, and according to Peter Ericson, chairman of the Node Pole, this latest development adds to the mix.

“This parliamentary decision sends a clear message that Sweden is serious about becoming the green home of the internet and taking global cloud service leadership over the short and long term,” said Ericson in a statement. “The combination of low electricity prices, a competitive tax rate and the abundance of renewable energy provides a case for a long-term investment climate that is extremely competitive.”

The break will apply to new and existing data centres which exceed ‘at least a 0.5 [megawatt] capacity, measured as installed effect excluding cooling facilities’, according to the press materials.

Read more: Swedish government study advocates tax cut for data centre providers

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